Port of Piraeus to become most important hub for Chinese imports into Europe

Author: CSEBA / Portseurope.com / Salzburger Nachrichten

14th January 2019

PIRAEUS – Crisis? In Greece’s largest port of Piraeus, it is not felt. In the first nine months of 2018, container throughput grew by 20%. In September, the increase compared to the previous year was even 27%.

If this pace continues, Piraeus will become the largest container port in the Mediterranean in 2019 – and the most important hub for Chinese imports into Europe.

At night the “Cosco Denmark” arrived in Piraeus. Now the ship is at the container pier III. Four giant cranes continuously lift the boxes off, as the containers are known in the jargon. The ship is of the state-owned Chinese shipping company China Ocean Shipping Company (Cosco). Most containers contain Chinese products.

And Fu Chengqiu also comes from China. Captain Fu, as he is known in the industry, is the CEO of Piraeus Port Authority (PPA). From the window of his office, the view over the ferry port, where the ships depart to the Greek islands. This is Piraeus, as the tourists know it. Here beats the heart of Europe’s largest passenger port.

But the future of Piraeus is in the west. In 2008, not even 434,000 container units were handled here. In 2017 there were 4.15 million. Piraeus is the fastest growing container port in the world.

Captain Fu is leading the Piraeus port which should become the gateway to Europe for China. The project is part of the “One Belt, One Road” initiative that President Xi Jinping announced in 2013, China’s “New Silk Road.” Piraeus is “the head of the dragon” in Europe – as Chinese analysts describe the importance of the port.

The “trade war”, which US President Donald Trump is now leading against China, gives the project a special significance. The more difficult it is for the Chinese to access the American market, the more important the European market becomes. They are therefore trying to put their commitment in Greece in a good light. Captain Fu speaks a lot about transparency, cooperation and fairness. He talks about the protection of the environment and the social obligations his company will fulfill. “We want to be a good partner,” he says.

The strategy is long-term. As early as 2008, Cosco entered into a lease agreement with the then conservative Greek government for the operation of a container terminal in Piraeus. But that was just the beginning. In 2016, Cosco acquired 51% of the port company PPA.

The contract provides that the Chinese take over another 16% of the shares in 2021. The investment cost Cosco a total of €368.5 million ($418.7 million). According to the contract, the company will have to invest another €300 million ($340.9 million) in the modernisation and expansion of the port until 2026. Next year, five container ships of the Giga class will be able to be handled there simultaneously. In Piraeus, the containers are partially reloaded by the large “motherships” to smaller freighters for further transport to other Mediterranean ports. Another part goes by rail to Central Europe.

The Chinese want to invest about €1 billion ($1.1 billion) in Piraeus. This includes the construction of a new cruise terminal. Piraeus will then be able to service four mega-cruise ships at the same time. Also planned is the construction of four hotels and a shopping mall on the harbour grounds. Behind this is the plan to make Piraeus more attractive as a “home port” for Mediterranean cruises. So far, most shipping companies leave their ships in Italy and Spain.

The investment should not only yield commercial profits, but also a political return. This hope is already fulfilled: in 2017, Greek Prime Minister Alexis Tsipras blocked a planned joint statement by the 28 EU states aimed at condemning human rights abuses in China. The reason: The resolution is a “non-constructive criticism of China”. Beijing thanked and praised Greece’s “correct attitude”.